If you need any more convincing that BC’s housing market is turning the corner, August home sales data for the province presents yet another compelling case.
A total of 7,093 homes changed hands throughout BC last month, up 4.9 percent compared to August 2018.
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“BC home sales continue to recover from a policy-driven downturn,” says Brendon Ogmundson, BCREA’s deputy chief economist.
Specifically, Ogmundson refers to mortgage stress testing introduced for uninsured mortgages at the onset of 2018.
The new rules were part of Guideline B20, a policy framework drafted by the Office of the Superintendent of Financial Institutions, a federal watchdog.
The stress test requires borrowers to either qualify for their mortgages at the Bank of Canada’s benchmark rate — an average of the Big Six banks’ posted rates — or 200 basis points above the borrowers’ contract rate, whichever is higher.
Similar testing had been implemented in 2016 for insured mortgages.
Following the rule changes last year, home sales across the country fell.
While BC home sales activity appears to be once more on an upward trajectory, it hasn’t fully recovered to previous levels.
“Home sales have been rising through the spring and summer, but still remain well below pre-B20 stress test levels,” writes BCREA’s Ogmundson.
While the average price of a BC home climbed 2.6 percent to $685,575 on a year-over-year basis in August, Greater Vancouver home prices remained below year-ago levels.
The average price of a Greater Vancouver home was $974,167, 3.7 percent shy of where the measure stood in August 2018.
Local performances across the rest of the province varied.
For example, Vancouver Island prices soared 8.7 percent annually, averaging $504,320 in August, while Victoria prices remained roughly unchanged at an average of $703,666.
Here’s how markets fared in BC: